Patricia's valueKerber, you brought up some interesting points. My sources indicate to me Richmont Mines and Patricia Mining will cease to exist before the end of May. I’m speculating Northgate Minerals will buy out Patricia Mining and Richmont Mines ahead of the AGM.
Craig Miller analyst at BMO, in my opinion, is one of the most conservative gold stock analysts in the sector. Craig follows Richmont Mines closely and in his November analysis, he has calculated a net present value of $75,000,000 towards the Island Gold mine. His analysis includes a long term price of gold at $600/oz. In his own words, he cares not to use any “fluff” in his coverage of gold companies. In the near future, I am expecting an upward revision from his next report on both the long term price of gold ($590) and the net present value of Island Gold.
My analysis of Patricia Mining:
Patricia’s owns 45% of Island Gold. Patricia’s shares are trading at a 12.3% discount to its net asset value (NAV) estimate of $0.82 per share using $600 price of gold. The discount is 63% to our net asset value (NAV) estimate of $1.19 per share at a spot gold price of $650/oz.
To add more basis to investing in Patricia, I expect a $0.10 - $0.12 cash flow per share is likely for 2007. A gold mining company operating in the most mining friendly region of the world—Quebec-should not and will not trade below 15 times its cash flow per share. Therefore if by slim chance Patricia Mining is still available on the market at the end of the year, $1.50 - $1.80 a share is in our sights. By shrewdly investing in Patricia today, it is sensible to expect a gain of 105% return in less than ten months.
SUMMARY ASSET VALUATION
Island Gold: $33,300,000
Balance Sheet Items: Debt: $8,500,000
Outstanding Shares: 33,350,000
DISCLAIMER: I am a value investor seeking undervalued gold mining companies. I am presently buying PAT and now hold 1.8% of the company. I have no intention of selling any of my gold stocks until fair value is attained on each of them.